Corporate Social Responsibility Reporting And Stock Liquidity

Stock liquidity is among the most important roles as one of the functions of capital market.At the same time,with the development of economy and society,enterprises have received more attention from the public and stakeholders in undertaking social responsibilities.This has led to a discussion of corporate social responsibility issues in the academic and practical world.A natural research question is:what is the economic consequences of social responsibility reporting?At present,the domestic and foreign scholars mainly study on whether the enterprises should bear the social responsibility or not,and then they pay attention to economic effects of bearing the social responsibility.The research of these two problems still need further exploration.Meanwhile,the empirical studies on the disclosure of corporate social responsibility information are relatively few.A few empirical researches are concerned about the relationships between the disclosure of corporate social responsibility and corporate financial performance or between the disclosure of corporate social responsibility and corporate value,which leads to the lack of analyses of other economic effects.According to the previous research,the main empirical challenge is the problem of endogeneity and self-selection as managers may strategically disclose social responsibility reporting information for different motives.Thanks to Shenzhen Stock Exchange and Shanghai Stock Exchange that require four kinds of listed companies to issue corporate social responsibility report with the annual report as the starting point in 2008,we can study the causal relationship between corporate social responsibility disclosure and stock liquidity from a quasi-natural experiment in Chinese financial market by collecting data manually and with the help of differences-in-differences method(DID method).We also try to explore the possible mechanism between CSR reporting and stock liquidity from two aspects of corporate nature and financial information opacity.It is found that the disclosure of social responsibility reporting improves the liquidity of stock.This positive correlation is more significant in non-state enterprises or in the enterprises with high information transparency.The contribution of this essay are as follows.Firstly,it alleviates the endogenous problems that may exist in previous research with the help of DID method,so that demonstrating the causal relationship between CSR report and stock liquidity more clearly;Secondly,this article explores the relationship further from two perspectives of the company nature and the information opacity.It has enriched the literature that the social responsibility information as a non-financial information can provide a supplement to the financial information.